Gold Surges to Fresh Peak Ahead of Federal Reserve Policy Call

Highlights:

• Record high: Gold surged above US$3,700/oz for the first time, trading at US$3,689.88 at the time of writing.
• Fed focus: Investors await the US Federal Reserve’s rate cut decision and updated economic forecasts.
• Supportive backdrop: Weak labour data and steady inflation boost expectations for further monetary easing, lifting gold’s appeal.

Fresh Milestone for Bullion

Gold prices surged to new highs as investors positioned for an imminent interest rate cut from the US Federal Reserve. At the time of writing, spot gold was trading at US$3,689.88 per ounce, just below its earlier record above US$3,700. The rally was also supported by a weakening US dollar, which slipped to its lowest level in more than 10 weeks, making bullion more attractive to global buyers.

Investor Focus on Fed Meeting

Markets have largely priced in a rate reduction this week, but attention is shifting to the Fed’s broader policy outlook. The central bank is set to release its quarterly “dot plot,” offering projections on growth, inflation, and interest rates. Federal Reserve Chair Jerome Powell’s remarks after the meeting will be watched closely for signals on how far policymakers may go with monetary easing.

Weak Labour Data Fuels Rate-Cut Expectations

Expectations of additional rate cuts later this year have grown after a series of disappointing US labour market reports and stable inflation data. A softer jobs outlook reduces pressure on the Fed to keep rates high, while subdued inflation provides room for further easing.

Positive Outlook for Gold

Falling rates usually support gold prices by reducing the appeal of bonds and other yield-based investments. With global uncertainty and monetary policy tilting towards easing, analysts suggest bullion could continue to attract strong investor demand in the months ahead. Gold’s record-breaking move underscores its status as a safe-haven asset, with investors increasingly relying on it as both a hedge against market volatility and a beneficiary of looser monetary conditions.

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